Further information:

See:  http://ubuntuforums.org/showthread.php?p=9999520

Here is a quote from the thread the above link points to:

"Ubuntu 10.04
Most of the previous solutions refer to the rt2870 driver with Ubuntu 10.04. 
Blacklisting the rt28xx driver as described before, and compiling your own 
driver works here, although you need to compile again after each kernel update.

As of kernel 2.6.33-xx it should be built in.

Ubuntu 10.10
Ubuntu 10.10 has the rt2870 driver built into the kernel, with 2 problems:
- You stil need to blacklist the rt28xx drivers as @chili555 points out
- You can only make a connection at 'g-speed' (max 54mpbs), no 'n-speed' 
(270/300 mbps) as @zipeppe found out

Compiling your own kernel to solve this problem, results in a lot of compiling 
errors. 
Putting /etc/Wireless/RT2870STA/ into /etc/Wireless/RT2870STA/RT2870STA.dat 
does not solve it either. 
It seems we indeed have to wait for RalinkTech to publish a new driver as 
@negora suggests ..."

End quote.

Comment:  Support for the widely used RT2870 chipset is still badly
broken and users worldwide are suffering.  Help!

-- 
USB WiFi adapter with rt2870 chipset won't connect
https://bugs.launchpad.net/bugs/549801
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